Bound4Retirement

An important consideration that can make an uncomfortable discussion for clients is the ability to bear a loss on an investment without it impacting on your Goals and Standard of Living.

Sometimes the conversation can be paradoxical, if you do not have much money to meet your goals then it may be prudent to invest more cautiously to ensure that you are not adversely effected by drops in the market when the time comes to take money from the investment.  If you have a healthy Cash reserve then you have the ability to withstand Volatility and therefore able to take more Risk in your long term investments.

A key aspect of Financial Planning, this conversation sometimes means that Goals have to be revised to meet your financial situation, different strategies may need to be considered, such as taking retirement later than envisaged or phasing retirement over time to give adequate income.

At times it means that Goals have to be reduced to be realistic in meeting your needs.

Time is important when it comes to Capacity for Loss; essentially, the earlier you start investing the better position you will be in.